Greater transferability of human capital for prefilers extends to education as well.
We find no statistically significant returns to pre-immigration work experience, suggesting the existence of imperfect transferability of human capital.
It is often assumed that due to limited transferability of human capital an initial mismatch, or overeducation, among immigrants can be expected.
We show that returns to human capital are considerably lower for immigrants as compared to natives and that there is no return to pre-immigration work experience, suggesting imperfect transferability of human capital.
Another hypothesis we test is whether quality of education or imperfect transferability of human capital obtained in the home country could explain the greater persistence of overeducation among immigrants.
They found that a greater amount of home country experience is associated with poorer job matches in the US and argued the imperfect international transferability of human capital as the main driving force for that outcome.
These range from imperfect international transferability of human capital to discrimination in the labour market to, perhaps, a combination of language and country of origin effect (Chiswick and Miller [2009]; Green et al [2007]).
Thus, imperfect transferability of human capital across countries has greater merit as explanation but even after controlling for region of birth and occupation, persistence in overeducation for immigrants significantly exceeds that for natives.
Nevertheless, we believe that this distinction could be the cause of different mismatch incidence since, firstly, the extent of the international transferability of human capital might vary according to this factor; secondly, it could reflect different levels of dissimilarities among labour markets; and thirdly, language and ethnic differences might vary consistently among different combinations.
Different arguments are presented as the source of divergence, for example, the imperfect international transferability of human capital (Chiswick and Miller, 2009a), low destination-country language skills (Green et al., 2007) or previous work experience in the home country (Piracha et al. 2012).
Our main hypothesis is that the imperfect transferability of human capital or discrimination in the host country does not exhaust the possible explanations for an immigrant's mismatch: we explicitly test for the possibility that the last job held prior to migration is a strong signal of a migrants' ability for a host country's employer.
